Post by Robyn McLellan, Associate Programme Executive at Hotwire: 

We’ve all been the person in the off-licence grabbing that pint of milk we’d forgotten during the weekly shop. We’ve all been the person rushing to pick-up that last-minute birthday card and we’ve certainly all been the person nipping out for that emergency Twix.

These unforeseen circumstances don’t always come to us when we have change in our pockets and ATMs at our disposal. So, we go for the next best thing and pay by card. Thankfully, we are no longer met with that all-too-familiar 50p ultimatum.  

Five months after PSD2, the problem merchants are facing is that there is still a cost to process card payments and the assumption is that it is them who must foot the bill. The problem now is that rather than solving the issue of customers taking on millions in charges every year, merchants are narrowing the payment options to save themselves from absorbing the cost.

While corporate credit cards are still widely accepted, HMRC as well as some travel agencies have stopped accepting personal credit cards as a direct result of the surcharge ban. Some are adding on mysterious sounding ‘service charges’ where they didn’t exist before and others are simply upping their prices.

Around the world we can see various approaches to surcharging but is there a perfect solution? In the US some states surcharge and some states don’t, in Canada the surcharge depends on the category of purchase and in Australia it’s a bit more ambiguous. I am writing this from Sydney where every day I’ve been met with a new kind of charge. In one shop it might be 50c on top of a purchase under $10, in another it might be 1.5% under $20 but the law dictates only ‘excessive’ surcharges are illegal.

It is clear that the surcharge ban was implemented in the UK with the best of intentions, but it is becoming increasingly obvious that consumers will not stand to benefit as much as the European Commission had hoped when they implemented the second payment directive in January this year.

So, in order for everyone to benefit, compromise must be reached without limiting consumer spending options or jeopardising business’ revenues. Just imagine a future where your unplanned purchases don’t have big repercussions on the small businesses you buy the from… It might be the closest you ever come to a guilt-free Twix.